Midas Holdings: The Catalyst Worth Waiting For Is Here; Buy, $0.475 - TP $0.75
MIDAS SP | Mkt Cap USD455m | ADTV USD3.2m
Last weekend, China Railway Corp (CRC) announced the result of its first
high-speed train tender in past two years. A total of 159 train sets
order have been split between CSR (108 train sets) and CNR (51 train
sets).We believe this is just the beginning of a new train purchase
cycle by Chinese government. Remain positive on Midas. Maintain BUY with
TP SGD0.75.
We expect Midas to win around RMB250-300m supply contracts in high-speed
train space this year. But it is very small compared to what we are
likely to see in FY14/15. We expect Midas’ order book to reach RMB1.5b
in FY15 onwards.
Historically Midas’ P/B closely followed its order book, which makes us
believe that currently undemanding P/B multiples deserve a re-rating if
order book could be substantially boosted to RMB1b or above.
Click here for full report weibin@maybank-ke.com.sg
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